Sanford Health eyes growth in senior care

Sanford Health officials are talking about the potential for growth after closing Jan. 1 on a deal to merge with Evangelical Lutheran Good Samaritan Society, another nonprofit group based in South Dakota that's also a large operator of senior care facilities.

Sioux Falls-based Sanford Health currently generates about $4.5 billion to $5 billion per year in revenue, while Good Samaritan sees annual revenue of $1 billion to $1.5 billion, said Kelby Krabbenhoft, the chief executive at Sanford, in an interview.

The merged organization will have enough scale to quickly resolve the problems, Krabbenhoft said, that drove about $37.5 million in losses at Good Samaritan in 2017, and a smaller annual loss last year.

"On a $6.5 billion company, the financial challenge for both of us was about $30 million," Krabbenhoft said. "That's less than about half of one percent."

The long-term care business is tough, with financial challenges that sometimes prompt facilities to shut down. But Randy Bury, a Sanford Health executive who is transitioning to a job as president at Good Samaritan, stressed the potential for growth.

"We'll be a growth company, and that's where the focus will be," Bury said.

Sanford Health now employs nearly 50,000 people with clinics, hospitals, health insurance and senior care services in 26 states.

Good Samaritan runs about 20 senior care and home health facilities in Minnesota. Sanford Health runs about a dozen hospitals in Minnesota, where the nonprofit group employs about 5,000 people, Krabbenhoft said.

When news of the merger first broke last summer, Sanford Health officials also said they were in talks to enter the Chicago market. But Krabbenhoft said the Chicago deal is not moving forward.